‘Hard time understanding what sets them apart’: As retail media grows rapidly, advertisers are uncertain where to spend

While advertiser interest in retail media has been growing in recent years — access to retailers’ first-party data has become more and more appealing as the third-party cookie crumbles — that growth has accelerated due to the pandemic. As previously reported by Digiday, advertisers in categories like electronics, personal care, clothing and pharmaceuticals joined consumer packaged goods brands in moving more ad dollars to Walmart, Target, Instacart and Amazon this spring. 

As retailers like Walgreens, CVS and Home Depot, among others, roll out new retail media networks they are playing catch up to Amazon, Walmart and Target, according to ad buyers, who say that as retail media has continued to grow it has not only become a more crowded sector — but also harder to differentiate between the retailers’ offerings. 

“Walgreens is subscribing to the new retail media playbook that’s been developed in 2020,” said Alex Barnes, media director at independent creative and strategic agency The Many, adding that like other retail media offerings much of  Walgreens’ pitch boasts access to “rich, deterministic first-party data” as third-party cookies are going away. “I have a hard time understanding what sets them apart [from other retail media networks]. The same goes for CVS.” 

Typically retail media networks pitch advertisers on access to first-party data (usually through a loyalty program) as well as the ability to close the loop on measurement and attribution if an ad converted to a sale. Aside from ads on the retailers’ digital properties, there’s also usually the ability to advertise in the retailers’ email or on its social channels. That the newer retail media networks’ offerings are so similar, it can be difficult for advertisers to figure out which retail media network to prioritize.

“How do you decide how much money to give to Walgreens or CVS [or the other retail media networks]?” said Elizabeth Marsten, senior director of marketplace strategic services at marketing agency Tinuti. “Everyone is asking brands for money. Who gets it and how much? In the end, how do I look at it all? That’s the question brands are asking. Nobody knows the answer right now. Whoever sells it first is the winner.”  

As retail media has become more crowded, the business-to-business marketing from retailers pitching advertisers on retail media networks has become more aggressive and that’s “increased client inquiries” for those networks, noted Barnes. At the same time, the brands interested in retail media have expanded beyond the CPG bread and butter as the “pool of brands that can’t ignore retail media is rapidly circling out further and further.” 

Buyers say that going into 2021, figuring out which retail media networks to prioritize and where to spend will be key for advertisers as with the retail media growth overlap is likely to happen. For example, a CPG brand might be advertising on a retailer’s media network as well as Instacart (as that retailer offers delivery via Instacart) and may be spending ad dollars on both to reach the same customer.

“Budget conflict will be an issue next year; there are more retailers asking for money than advertisers have budgeted for,” said Marsten. “There are more questions than answers right now as we move into Q1 of 2021, especially not knowing what the store footprint looks like.” 

That said, it’s still early days for retail media. “We’re in the growing, expansionary phase,” said Frank Kochenash, president of marketplace services at Wunderman Thompson Commerce. “As the retail media networks mature, the performance will guide what happens next in who wins and who consolidates.”